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Zapp: Make the 'free riders' pay

In a recent editorial, “The Party of Taxes,” the Savannah Morning News focused on taxes, which people who can afford to buy health insurance but refuse to do so, will have to pay.

You fail to mention that these people are what economists call free riders: When they are sick they often go to emergency rooms and have their expenses covered by the rest of us.

By not having health insurance, these people do not benefit from the preventative care measures which reduce their need for expensive services. By requiring them to have insurance, we as a country will spend less on their care.

Some of us think the taxes or fees should be even higher. We set fees for speeding and driving over the limit high enough to dissuade the harmful behavior we need to curtail.

The Heritage Foundation plan, embodied in what has become Obamacare, had been supported by all leading Republicans when Congress debated the Clinton proposal during the 1990s.

It mandates coverage so that the insurance firms avoid the adverse selection problem.

Without this requirement, people who are most likely to purchase coverage are those with the greatest need for it. This raised the cost for the insurance companies and therefore the cost of premiums for the rest of us. When everyone is covered, our average premium will fall.

We should always debate taxes in a democracy. But claiming that a tax is bad is dishonest without also discussing what the tax revenue would be used for and what it would achieve.

Do we support taxes for national security, law enforcement, public schools, highways, the judicial system? Of course.

In our modern society we use tax revenue to do much more than what Adam Smith thought necessary in 1776. He and I would probably agree not to use tax revenue for baseballs stadiums or tax breaks for companies to move from one location to another. However, we would agree on infrastructure investments such as bridges and ports (his day job was a customs inspector) and for public health programs which reduce the spread of diseases.

The basis for these decisions would or should be some sort of cost-benefit analysis. In health care, we now spend the largest percent of GDP (16-18 percent) compared to all other industrialized nations and do not score highest on outcome measures. We need to find how we can use our scarce funds better.

We can learn from what other countries have done. Switzerland, the most conservative country in Europe, adopted a mandated insurance system during the end of the previous century.

They now spend 11.4 percent of their GDP on health care, less than two-thirds of what we pay.

Kenneth Zapp, Ph.D. is professor emeritus, Metropolitan State University, and adjunct professor, Savannah State University and counselor at Savannah SCORE.